Dayanidhi says Brother Seized Group Control ‘Fraudulently'

Time of India

4 hours ago

A simmering rift in the Maran family that owns the
Sun Group
is out in the open, said people with knowledge of the matter.
DMK
lawmaker and former Union minister
Dayanidhi Maran
has sent a legal notice to older brother
Kalanithi Maran
, who is chairman and managing director of the ₹24,000-crore
Sun TV Network
, accusing him of fraudulently seizing control of the company through a disputed share allotment in 2003. He has demanded restoration of the company's shareholding structure to its pre-September 2003 status, when the Maran family and that of the late M Karunanidhi owned equal shares in the company.
Karunanidhi, who died in 2011, was head of the DMK and chief minister of Tamil Nadu. His son MK Stalin is current chief minister. If the dispute goes to court, it will pit Kalanithi against his brother and the Karunanidhi family, with control of the media giant at stake. As the dominant channel in Tamil Nadu, Sun TV is highly influential and regarded as having benefited from its proximity to the ruling party.
In the notice, sent through his lawyer K Suresh, Dayanidhi alleges that his brother allotted 1.2 million equity shares to himself on September 15, 2003, without proper valuation, shareholder approval or board resolutions.
At face value, the shares were priced at Rs 10 each, but the younger Maran claims they were worth approximately Rs 3,500 crore at the time, as Sun TV was a cash-rich and profitable entity.
The timing of the alleged transaction coincided with the death of the brothers' father, former Union minister Murasoli Maran.
Dayanidhi's contention is that Kalanithi used this opportunity to gain 60% control in the company—up from zero—without informing or consulting the other key stakeholder, MK Dayalu, wife of Karunanidhi, who was representing the family. Murasoli Maran was Karunanidhi's nephew.
The Maran brothers didn't respond to queries. Lawyer Suresh did not offer any comment.
As per the legal notice, Kalanithi's shareholding increased to 60%, while the shareholding of other legitimate stakeholders was diluted to 20% each.
Dayanidhi claims the allegedly fraudulent allotment allowed Kalanithi to earn over Rs 5,926 crore in dividends till 2023, and Rs 455 crore in 2024 alone, apart from additional gains from bonus share allotments.
He further accused Kalanithi and his wife, Kaveri, along with other associates, of misusing these 'proceeds of crime' to acquire valuable businesses and assets, including Sun Direct TV, Kal Radios, Sun Pictures, South Asian FM and the Indian Premier League (IPL) franchise, Sunrisers Hyderabad.
Investments were allegedly also made in domestic and international mutual funds and REITs (real estate investment trusts) worth over Rs 8,500 crore.
Dayanidhi has demanded that all shares, assets and financial benefits obtained since 2003 be returned to the original shareholders within seven days, failing which he will initiate civil, criminal and regulatory proceedings.
The younger brother also plans to escalate the matter to the Serious Fraud Investigation Office (SFIO), the ministry of information & broadcasting, as well as the Board of Control for Cricket in India (BCCI), seeking cancellation of broadcasting licences and ownership rights to Sunrisers Hyderabad.
Dayanidhi further alleged illegal transfer of shares from their deceased father to their mother — and subsequently to Kalanithi —without the legal heir's consent; misuse of initial public offer filings through misleading disclosures, and complicity of auditors and company officials in facilitating the fraud.
The MP also claimed that the two families incorporated Kungumam Publications in 1978 with both families having an equal shareholding. He also said the intention behind founding all the companies by the original promoters was to have 50% stakes in each of the businesses for both families.
Kalanithi started the Tamil Sun TV channel in 1993 and built it into a sprawling media giant, encompassing multiple TV channels in south Indian languages as well as a film production house, taking advantage of connections with the state establishment, industry watchers said.